According to a notification of the Directorate General of Foreign Trade (DGFT), the "import policy" is amended from "free to restricted" for refined bleached deodorised palm oil and refined bleached deodorised palmolein.
Asked if India has imposed a trade curb on Malaysia, Ministry of External Affairs Spokesperson Raveesh Kumar said the notification issued is not country-specific, but product specific.
"When you are looking at issues pertaining to the import of any product from any country, there are basically two factors -- one is the commercial decision and the other could be defined by the trade policy and in this case it is being defined by the trade policy," he said.
According to a notification of the Directorate General of Foreign Trade (DGFT), "import policy" is amended from "free to restricted" for refined bleached deodorised palm oil and refined bleached deodorised palmolein.
There are three different categories under which items can be imported --open, restricted and prohibited, he said.
"This is not under prohibited category. Why do you presume imports will be stopped. It is just that a certain procedure will be put in place and there are hundreds of products that are under this category," Kumar said.
"But, at the same time, the status of the relationship between any two countries... naturally any business will look at it before they get into trading. So the state of relationship is important. That happens to be a factor," he said.
Sources said the government''s move is not likely to impact Nepal much which also exports the commodity to India.
Putting the commodity in restricted category means an importer will require licence or permission for the inbound shipment.
India, the world''s largest importer of vegetable oils, buys nearly 15 million tonne annually. Of this, palm oil comprises 9 million tonne and the rest 6 million tonne of soybean and sunflower oil.
Indonesia and Malaysia are the two countries which supply palm oil.
Malaysia produces 19 million tonne of palm oil in a year, while Indonesia produces 43 million tonne, the trade data showed.
The move comes in the backdrop of remarks by Malaysia on the new citizenship law and Kashmir issue.
India had last month summoned the Charge d''Affairs of Malaysian embassy and lodged a strong protest with him over Malaysian Prime Minister Mahathir Mohamad''s "insensitive" comments criticising the new citizenship law.
Asked about India-Malaysia ties, Kumar said in the past, there have been statements by the Malaysian Prime Minister on which India has reacted sometimes very strongly.
"We have told them that we have age-old ties and have had a very good relationship. We have told them that they should keep in mind the sensitivity that we have on some of these topics," he said.
"Unfortunately despite our statements, we keep on getting similar statements and sentiments from their side. We so hope that at some point, they will realise that this is not the appropriate thing to do," Kumar said. PTI ASK ZMN